Herefordshire Community Foundation, The Fred Bulmer Centre, Wall Street, Hereford HR4 9HP Registered Charity No. 1094935 Registered in England and Wales No. 4468139

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Company Giving through the Herefordshire Community Foundation

Herefordshire companies have a significant record in supporting fundraising in the community, by giving donations, encouraging employee volunteering and in providing gifts in kind to good causes in the County. But not all companies have the time, or the knowledge, to be able to research the vast range of needs in the county, to know how to respond to these effectively and to be get the feedback that tells them that their gift has been well-used to bring maximum benefit to the cause they are interested in.

Many companies wish to improve the impact of their financial support by ensuring that their contributions are made as effectively and tax efficiently as possible, while at the same time enhancing their reputation in the public arena. The Herefordshire Community Foundation has been set up to provide the practical support and advice needed to achieve this, through developing a range of charitable services tailored to match corporate aspirations with the needs of local charities and community groups - to everyone's mutual benefit.

A partnership with the Foundation means that your company can maintain direct control over where your funds go, and receive full recognition for all contributions made. It takes away the administrative burden of giving and leaves the company confident that donations will be made tax efficiently and applied to best effect. In particular, the Foundation can assist companies who have not considered charitable giving in the past .

Many companies and businesses believe that a significant amount of giving in a financial year is needed to have any effect - and consequently don't get involved in charitable giving. But giving through the Foundation can enable small amounts of donated money to make a real difference in the community.

There are a variety of options from which a company can choose and two possible types of corporate funds: distribution and endowment...

COMPANY DISTRIBUTION FUNDS

Distribution funds are tax efficient donations that are held by the Foundation and distributed as grants throughout the year. This type of fund enables the company to make tax efficient charitable donations to the Foundation, in their own name, from which it may direct the Foundation to make appropriate awards at any time. Alternatively, the company can advise the Foundation of its charitable preferences, selecting the types of organisations and projects it wishes to support. The Foundation will solicit applications, and expertly assess organisations and projects before making recommendations. Should the company choose, the Foundation may use discretion on its behalf. As part of this service, the Community Foundation will ensure that the company receives regular reports on the activities supported by the donations and can arrange visits to projects and publicity focused events which can raise the public profile of the company.

ENDOWMENT FUNDS

Endowment funds are permanently invested and the interest from them is allocated as grants. The value of the funds grows over time, creating an expanding and sustainable source of funds for grant making in perpetuity and a permanent testimony to the company's commitment to the community. Grants from these funds will be given in the company's name. Investors in endowed funds receive regular reports about their investment, and about the grants given in their name. As with Distribution Funds, companies can continue to have as much say as they want in the good causes to which the grants are given, or can set broad guidelines as to their preferences. Your company can set up a Named Fund in the Herefordshire Community Foundation with as little as £15,000.

See Case History A on the right.

 

The new Grassroots Endowment Challenge also has significant tax advantages for businesses interested in setting up an endowment fund with Herefordshire Community Foundation. Grassroots Challenge matches your donation with £1 from the Government for every £2 you invest in your fund. Added to this are the advantages of a Corporation Tax saving. Please contact us for more details.

RETIREMENT AND COMPANY DISPOSALS

Many business people now think about how they can give a lasting legacy on retirement or the sale of a business. Setting up a permanent fund in the Herefordshire Community Foundation, in the name of your business can ensure this.

See Case History B from Scotland, on the right.

GIFTS OF SHARES

Herefordshire Community Foundation can also receive gifts of shares. These can then be used to set up a Named Fund in the Foundation. Share gifts to a charity enable the disposal of shares without liability for capital gains tax, and they can also be offset against earned income. Your financial advisor can provide you with more information on using this route to support local charities, through the Herefordshire Community Foundation.

See Case History C and Case History D

As a member of the Community Foundation Network, we can provide many examples of the ways in which Community Foundations have helped local businesses give more effectively to their local communities. Our aim is to build similar partnerships in Herefordshire with local businesses, helping you help our communities.

Whichever way your company chooses to give, giving through a community foundation is tax effective, and can ensure that your giving achieves the greatest impact. We do this by adding value to local giving through offering donors:

• Impact - by enabling their money to reach groups tackling local needs.
• Flexibility - by offering a tailor made service reflecting their interests.
• Convenience - by managing every aspect of the grant making process.
• Expertise - by using experience in careful assessment of grant requests.
• Connection - enabling companies to see the results of their giving through reports and visits.
• Permanence - by building a lasting endowment for future generations.

The Herefordshire Community Foundation is registered charity - and it is part of a national network of Community Foundations across the UK. Community Foundations are unique charities with a dual role as grant givers and promoters of effective charitable giving - strongly linked to their local communities.

 

 

CASE HISTORY A

In 1991 local businessman Louis Sherwood chose to use the Greater Bristol Foundation as a means of accomplishing his charitable goals, and the partnership has been of mutual benefit over the years. A donor directed fund enables him to target his giving in two different ways: a proportion of the fund is assigned to supporting immediate needs in the community at the discretion of the foundation and the remainder is used to support cause of his choice.

 

He says: "A donor directed fund offers the best of both worlds. I can rely on staff expertise to distribute funds to the most pressing needs in the community, reaching the smaller local projects that would be difficult to find out about on my own. Yet I can also instruct them to make donations from my fund to particular local charities that I wish to support. It's a very convenient and effective arrangement."

CASE HISTORY B

Mr. M. was selling his family business (2nd generation). Mr M. was thinking charitably, and planned to place £1 million in an invested vehicle for charitable giving. Despite some family members already running a charitable trust, he was very receptive to the idea of using the Scottish Community Foundation and establishing a fund, rather than setting up his own trust, or indeed simply adding to the existing one. A call to, and meeting with, the Scottish Community Foundation convinced Mr M that a community foundation was a possible way to achieve maximum benefit for his fund, with the assurances that grants from the fund could meet his requirements.

One of the benefits that he would receive from the community foundation would be a detailed local knowledge of the area in which he would like to see his fund operating, so that he could be assured that real local needs could be met. He did,, though, want to check that this would be the best vehicle for his charitable giving. The Scottish Community Foundation has developed close relationships with many professional advisors, and one of these was the financial advisor to Mr M. This company was able to assure Mr M that the fund model, versus an independent trust, would work for his needs and that the community foundation could indeed fulfil his charitable wishes.

 

CASE HISTORY C

Ringtons Tea, based in Northumberland, gave shares worth £250,000 to a Named Fund they set up in the Community Foundation serving their area. With the tax arrangements, this made good sense for the company, and also provided more funds than if the shares had been sold and the return then donated through the Community Foundation.

 

CASE HISTORY D

The Wiltshire and Swindon Community Foundation also benefited from gifts of shares. In 2000, A, who is an active investor, donated 1,500 shares worth £4,500. As A. had acquired these shares through a bonus scheme, the full £4,500 could have counted as a capital gain which would have attracted 40% tax. If he had simply sold the shares, the tax bill would have been £1,800. With advice from staff at Wiltshire and Swindon Community Foundation, A escaped both capital gains tax and dealing fees by giving the shares to the charity and was able to deduct £4,500 from his taxable income for that year. His overall saving in tax was £3,600, meaning the donation effectively cost him just £900.

 

Some Case Histories